Wall St. drops again, but tech bounce helps limit losses

Wall Street dropped on Thursday as investors continued to shun risky investments, but the decline was less severe than the brutal sell-off in the previous session as a bounce in some high-growth technology stocks helped limit losses.

Energy stocks, pressured by a drop in oil prices, and financials, with insurers hit by worries over impact of Hurricane Michael, led the losses.

But the technology sector, which led the sell-off on Wednesday, gained 0.46 percent. Microsoft rose 1.4 percent, while chipmakers such as Micron and AMD led the gainers among tech stocks.

“The environment is still risk-off, tech stocks seem to have stabilized but haven’t quite bounced back yet,” said Lamar Villere, portfolio manager at Villere Balanced Fund in New Orleans.

“Investors are still nervous, but things seem to have calmed a bit. This certainly doesn’t seem as bad as yesterday.”

“The growth stocks, which are the path leaders, typically bounce from the bottom first,” said Tom Plumb, portfolio manager of the Plumb Balanced Fund in Wisconsin.

The stock market is caught in the backdrop of a storm of worries: the impact of trade tensions on corporate profits to Treasury yields at multi-year highs and hawkish comments from Federal Reserve officials. That culminated Wall Street’s biggest sell-off in eight months on Wednesday.

On Thursday, a smaller-than-anticipated rise in consumer prices eased some fears of inflation pressures rising, but did little to change expectations of the Federal Reserve to raise interest rates in December.

The indexes fell below key technical levels, the S&P and the Nasdaq dropped below their 200-day moving average prices and the Dow slipped below its 100-day moving average, before the slide eased.

At 1:25 p.m. ET the Dow Jones Industrial Average was down 114.81 points, or 0.45 percent, at 25,483.93, the S&P 500 was down 14.95 points, or 0.54 percent, at 2,770.73 and the Nasdaq Composite was up 14.73 points, or 0.20 percent, at 7,436.78.